This is article #7 of “180 Days to Startup” series documenting my entrepreneur journey. In case you want to start from the beginning, please click HERE to the first article.
To identify the tokenomic of a blockchain-based project, we need to first figure out how blockchain plays a part in it. Ultimately, tokens are bi-products served as reward for those that contribute to the ecosystem.
In our co-founder’s article, he talked about blockchain’s ability to eliminate the middleman. Applications that are decentralized doesn’t need a facilitator in between multiple parties to process transactions. Depending on the application and how that benefit is utilized, it can have have significant user-benefit.
Key word here is decentralization. In our opinion, it is blockchain’s BIGGEST selling point. Everything else (cryptocurrency, smart contract, tokenomics, etc) are all meant to support the decentralization aspect of the application. We believe that a blockchain-based product should have a decentralization aspect in it that’s actually beneficial for the users.
To avoid cheating, we need a gate keeping process to validate all the Challenge submissions. In our use case, blockchain plays a critical part in decentralizing the voting function of our platform. It effectively eliminates the need for an overseer of the Challenge submission approval process. If we were to do it the traditional way, we may have to ask the business owner themselves to be approving all submissions. This can potentially be problematic because:
By decentralizing the voting mechanism and allowing the whole network to help validate, we can transparently automate the process and minimize the time commitment from business users. It can also help businesses to avoid dealing directly with angry Challenge participants that got their submissions rejected.
As for the role of NODIS token itself, it is the reward system for those that contributed to giving businesses more online exposure. Both Challenges and submission voting are all a part of the cycle of getting businesses noticed online. On top of that, the ability to exchange for vouchers using their NODIS tokens will motivate the users to shop in-store, which means more traffic.
Knowing the purpose of blockchain and tokens is key to developing a sustainable tokenomic. According to Nasser Rahal, tokens have a few buckets of characteristics to consider: type, purpose, values, utility, and legal status.
Effective integration of tokens into the ecosystem is absolutely critical to any project that uses cryptocurrency. Every token is unique by its characteristics in the different buckets. The red line above shows the positioning of NODIS token.
In summary, our research/evaluation on blockchain usage and tokenomic helped us to designed Nodis.io to provide the following benefits to our users:
In my next article, I want to talk about how I developed a message for my customers and the general public. Why is that important? Well, I confused 95% of the people that I surveyed when I first asked for people’s feedback on our idea. The concept of blockchain is confusing and the idea itself isn’t exactly easy to grasp at first.
Ultimately, my target customers are small businesses that are often late in adaptation of new technology. Getting their buy-in will be very difficult if I was to start with “blockchain” or “cryptocurrency”.
If you find what I wrote even just a tiny bit interesting, please follow me on Medium and give me some claps. You can also follow us on Telegram and Instagram to get the latest content and project updates. Thanks for reading!